Lecture 1- Introduction to management accounting for performance and decison making

Control process- The process of ensuring that a firm's [blank_start]activities conform[blank_end] to its [blank_start]plan[blank_end] & that its [blank_start]objectives[blank_end] are [blank_start]achieved[blank_end]

Action controls- [blank_start]Observing[blank_end] the actions of [blank_start]individuals[blank_end] as they go about their [blank_start]work[blank_end], also known as [blank_start]behavioural[blank_end] controls

Personnel, cultural & social controls- Personnel controls involve [blank_start]helping employees[blank_end] to [blank_start]perform well[blank_end] through the use of [blank_start]selection[blank_end] and placement, training, job design, etc. Cultural & social controls involve the selection of people who have already been [blank_start]socialised[blank_end] into adopting particular norms & patterns of [blank_start]behaviour[blank_end] to perform particular tasks

Results controls- [blank_start]Collecting[blank_end] & [blank_start]reporting[blank_end] information about the [blank_start]outcomes[blank_end] of work effort, also known as [blank_start]output[blank_end] controls

Feedback control- [blank_start]Monitoring[blank_end] outputs [blank_start]achieved[blank_end] against [blank_start]desired[blank_end] outputs & taking whatever [blank_start]corrective[blank_end] action is necessary if a [blank_start]deviation[blank_end] exists

Feed-forward control- [blank_start]Comparing[blank_end] predictions of [blank_start]expected[blank_end] outputs with the [blank_start]desired[blank_end] outputs & taking [blank_start]prior[blank_end] corrective action to [blank_start]minimise[blank_end] any [blank_start]differences[blank_end]

Goal congruence- The [blank_start]situation[blank_end] that exists when controls [blank_start]motivate employees[blank_end] to behave in a way that is in [blank_start]tune[blank_end] with the organisation's [blank_start]goals[blank_end]

Controls- These are [blank_start]measurement[blank_end] & [blank_start]information[blank_end]. It's used to help determine what [blank_start]control[blank_end] action needs to be [blank_start]taken[blank_end]

One form of action controls is [blank_start]behavioural constraints[blank_end] ([blank_start]prevent[blank_end] people from doing things that [blank_start]should not[blank_end] be done i.e. [blank_start]physical constraints[blank_end] such as [blank_start]passwords[blank_end])

Another form of action controls is [blank_start]preaction reviews[blank_end] (involve approval of [blank_start]action plans[blank_end] of individuals being [blank_start]controlled[blank_end] before they [blank_start]undertake[blank_end] course of action)

Third form of action controls is [blank_start]action accountability[blank_end] (involve defining [blank_start]actions[blank_end] that are [blank_start]acceptable[blank_end] or [blank_start]unacceptable[blank_end], [blank_start]observing[blank_end] actions & [blank_start]rewarding[blank_end] acceptable or [blank_start]punishing[blank_end] unacceptable actions)

One harmful side-effect of results controls is that they can lead to [blank_start]lack[blank_end] of [blank_start]goal congruence[blank_end] when employees seek to achieve [blank_start]performance targets[blank_end] in way that [blank_start]is not[blank_end] organizationally [blank_start]desirable[blank_end]

Another harmful side-effect of results controls is that they can lead to [blank_start]data manipulation[blank_end] & [blank_start]negative attitudes[blank_end]. This could result in [blank_start]decline[blank_end] in morale & [blank_start]lack[blank_end] of motivation